Renter's Insurance: Yes, You Need It and Here's How to Choose the Right Plan

Does your rental lease require renter’s insurance? Even if you do not see renter’s insurance listed as a term for fulfilling the lease on your new North Carolina rental home, it is still highly recommended that you invest in this important insurance coverage. When you rent a home in North Carolina from Red Door Company, your lease will require you to have renter’s insurance policy.

For those of you unfamiliar with renter’s insurance, below you will find helpful information sharing why you need it and how you can choose the right renter’s insurance policy and coverage to fit your budget and needs.

Why Tenants Need renter’s Insurance

When you are a tenant, and a tree limb breaks a window, the toilet starts leaking, or the dishwasher stops working, you simply contact the property management company or landlord to have these items fixed. You may think to yourself, “Well, at least the cost doesn’t have to come out of my pocket.” It is this type of reasoning that leads tenants to think that they don’t need renter’s insurance, especially, when it isn’t a specific requirement of the rental agreement they signed.

You do, however, need renter’s insurance even when your lease doesn’t specify you must have it. Here’s why: your landlord’s insurance likely only provides coverage for the rental property’s structure. For example, a window that is broken by a falling tree limb. Also, it may list specific exclusions which will affect you in the case of an accident, emergency or theft.

On the other hand, a renter’s insurance policy protects your personal possessions by allowing you to recover their value in case of fire, theft, lightning, wind or other covered peril. In other words, if the tree limb broke not only the window but also your lamp and coffee table, then you would now have coverage for those items under a renter’s insurance policy. These policies can also protect you against a liability lawsuit and offer monetary assistance for temporary housing in case your rental home flooded after the tree limb broke the window during a torrential downpour.

How to Choose a Rental Insurance Policy

Now that you understand why you need to obtain renter’s insurance coverage, how do you decide what type of policy to purchase? Let’s start by looking briefly at the types of coverage you should consider when choosing a renter’s insurance policy.

Personal Property Coverage – This renter’s insurance coverage is pretty straightforward. Your personal property, up to a specific dollar amount, will be covered in cases of theft, loss or destruction in the event of fire, wind, theft or other covered perils.

Additional Living Expenses – A very important coverage that will provide temporary living expenses, including hotel bills and dining at restaurants if your rental home becomes uninhabitable.

Liability Coverage – If you are found at fault for an accident that injures a guest, then the liability coverage in your renter’s insurance policy can help pay for your legal expenses as well as medical bills and other damages. If you are allowed to keep a dog in your rental property, ask your insurance agent if your renter’s insurance liability coverage has a dog bite exclusion.

Contents Manipulation – If repairs are needed at your rental home and your contents need to be physically moved by a professional moving company, then contents manipulation coverage will pay for this.

For more information on purchasing renter’s insurance, we recommend you read “A Consumer Guide to Renter’s Insurance” provided by the North Carolina Department of Insurance. The next step you should take is sitting down and talking to an insurance agent. An insurance professional will work with you to find the right coverage amounts and best renter’s insurance policy to fit your needs.